Cancel Orders: 2013-09-30 5:45 ET
Good morning forex friends! No luck on catching a move higher as the pullback got within 10 pips of my entry orders before shooting higher in last week’s trade! With the looming US government shutdown looming, I’m getting back on the sidelines.
Before you move on, for those who are not familiar with my framework, signals, setups, or acronyms, please visit my discretionary trading framework blog.
With a light week in terms of economic catalysts, EUR/USD stayed in a pretty tight range last week, not getting low enough to trigger my buy order at 1.3450. It’s a shame because buyers were in total control all week as shown by the rally up to the 1.3550 area to top out the week.
Now that we’re in a new week, with the potential US government shutdown approaching and some bearish euro sentiment thanks to the Italian government crisis, I’ve decided to hit the sidelines by closing out my open orders to buy EUR/USD at 1.3450. No trade.
It’s the start of a new month and the final quarter of 2013, so it should be an action packed week, especially with the situation in the US government brewing. Stay tuned for new ideas and observations by following me on Twitter and Facebook. Good luck and good trading!
Trade Idea: 2013-09-24 20:45 ET
This is mainly an anti-USD trade because I think the Fed is still the main driver for pretty much every financial market out there. And while there is uncertainty of an “OcTaper,” I think weak USD is the trend right now.
So, we got a pullback this week and I think that if we see a retest of the broken resistance area between 1.3400 – 1.3450, buyers may take another dip, or at least stick their toes in to test the waters. I’m gonna be a little bit aggressive by going long at the top of that range with a wide stop equal to half of its weekly ATR (average true range). Looking back, the next major resistance area was last seen Feb 2, 2013, so that’s my max profit target. Here’s what I’m going to do:
Long half position at 1.3450, stop at 1.3350, max profit target at 1.3700
I’m only risking 0.50% of my account on this one, and with this trade structure, I have a potential reward-to-risk ratio of about 2.5:1. If this does trigger and moves my way, I do look to scale in to maximize my reward. But of course, anything can happen in the forex markets, so if the story changes, I’ll be sure to reassess and adjust quickly if necessary. Stay tuned by following me on Twitter and Facebook!